SHANGHAI, May 29 (Reuters) - The Chicago Mercantile Exchange plans to launch steel rebar swap futures, amid growingappetite among Western players for a similar steel derivativetraded in Shanghai.

Lawrence Leong, director of customer development and salesat CME Group, said the launch would come in the fourth quarterof this year, adding that the exchange would be collaboratingwith Chinese consultancy Mysteel.

Some 1.6 billion tonnes of rebar was traded on the ShanghaiFutures Exchange (ShFE) in 2011 - volume which dwarfs any steelderivative traded in the West.

The ShFE rebar trading volume includes both sides of trades.

The second most actively traded was the London MetalExchange's steel billet contract, which saw volume of less than15 million tonnes last year.

Shanghai rebar futures are highly popular due to highliquidity and exposure to China, the world's top steel market,although strict regulation in the country is still temperinggrowth.